a ) Burnham Corporation is considering leasing a new equipment. The lease lasts for 8 years. The lease calls for 8 payments of $206,000 per year with the first payment occurring immediately. The equipment would cost $1,400,000 to buy and would be straight-line depreciated to a zero salvage value over 8 years. The firm can borrow at a rate of 5%. The corporate tax rate is 25%. The actual pre-tax salvage value is $50,000. What would the NPV of the lease relative to the purchase be?

		-$10,446.21
		$9,309.51
		-$13,192.73
		$14,847.63
		-$16,001.48

b )The corporate tax rate is 25%. What is the after-tax cash flow from leasing relative to the after-tax cash flow from purchasing in year 6?

		-$198,250
		-$216,250
		-$237,750
		-$248,500
		None of the above